According to the Dutch ministry of security and justice, the closing of 8 prisons in ‘Netherlands’ had been announced due to a decline in the crime rate, back in 2013. Over a year, as the crime rate continued to decline, 19 prisons were scheduled to be closed.
However, those people who were convicted to a crime opted for electronic tagging instead of incarceration; which allows people to go back to work and be productive. And not only that, but it also saves about $50,000 per year per person. (about $50 million saved per year for every 1000 people).
Primary reason for fewer prisoners in Netherlands includes not only decline in the crime rates, but also, focus on rehabilitation of offenders and progressive drug laws.
Countries with low incarceration like Netherlands typically take a different approach to the criminal justice, and likewise, their investment in social services.